A RASTER is an image made from a grid of pixels. It is the image type that is used in Adobe Photoshop. It can be more detailed than a vector, but it cannot scale up or down without distortion and when you scale it up too much it will pixelate

RASTER file types:

.JPG, .GIF, .PNG, .PSD, .RAW, .NEF, .HEIC

A VECTOR is an image that is made of anchor points and paths between them. This is the type of image you create in Adobe Illustrator. It can expand or shrink infinitely with no pixelation. 

VECTOR file types: .AI, .EPS, .SVG